The Research On The Impact Of Intergoverntal Fiscal Competition On Local Public Service Supply

As the social economy continuously develops, people's livelihood attracts more and more attention, and people's demand for public services also grows. How to achieve effective public service supply, especially local public services, plays a key role in promoting the construction of harmonious society, social stability and political balance. However, due to the fiscal competition formed in the decentralized financial management system of China, the deviation exists in local government expenditure,which is largely invested to infrastructure and other projects with a significant effect on GDP growth in a relatively short period of time and even to repeated construction,while only a small amount of expenditure is invested to public services. These result in a general lack of public service supply, especially local public service supply that is in significant shortage. To this end, it is of great theoretical and practical significance to make a detailed qualitative and quantitative analysis of the impact of intergovernmental fiscal competition during the decentralized reform process on local public service supply.This article explored the impact of intergovernmental fiscal competition in the decentralized fiscal administration system of China on local public service supply from the normative analysis and empirical analysis. The theoretical analysis first defined the concept of intergovernmental fiscal competition and public services and then analyzed the way for intergovernmental fiscal competition and tax competition to impact local public service supply from the perspective of intergovernmental fiscal competition and tax competition. Based on the theoretical part, the empirical analysis also from the perspective of fiscal expenditure competition and tax competition made first a stationary test of the panel data as well as a co-integration test of the relationship between variables. On this basis, the static and dynamic econometric models were built, which were estimated by software STATA10. The results showed that the GMM estimation was the most reasonable result and the estimation result showed that the fiscal expenditure competition and tax competition inhibited the improvement of local public service supply to some extent. Finally, the impact of fiscal competition in the eastern, middle and western regions on the public service supply was analyzed.